Restructuring Layoffs in Ontario: Know Your Rights

When a company restructures, jobs are often cut — but that doesn’t mean you lose your rights. In Ontario, a restructuring layoff is treated as a termination, which means you may be entitled to severance pay of up to 24 months’ salary.

Employers sometimes suggest that layoffs caused by restructuring are unavoidable and therefore exempt from severance. That’s not true. Whether your role is eliminated, your department is downsized, or your employer calls it “restructuring,” you still have rights under the law.

What is a Restructuring Layoff?

A restructuring layoff happens when your job is cut because of business changes — not because of performance. Examples include:

• Mergers or acquisitions
• Department reorganizations
• Cost-cutting measures
• Shifts in company strategy

Even if your employer has a valid business reason, they must still comply with Ontario’s Employment Standards Act (ESA) and common law.

Termination Due to Restructuring: What Are You Owed?

If your job is permanently eliminated (terminated without cause), your employer must provide:

• Termination pay Ontario (ESA minimums)
• Severance pay Ontario (common law entitlements, which are often much higher)

The amount depends on:

• Your age
• Your role and level of seniority
• Your length of service
• The availability of similar work in your industry

Job Eliminated Due to Restructuring: Common Myths

⚠️ Myth 1: “Because it’s restructuring, no severance is owed.”

• Wrong. You’re still entitled to full severance.

⚠️ Myth 2: “Restructuring layoffs aren’t terminations.”

• Wrong. If your role is cut permanently, it’s a termination under Ontario law.

⚠️ Myth 3: “You must sign the severance package right away.”

• Wrong. You should always get legal advice before signing an offer or a full and final release.

Can Restructuring Layoffs Be Wrongful Dismissals?

Yes. A restructuring layoff may amount to wrongful dismissal in Ontario if:

• You were denied proper notice or severance
• Your employment contract doesn’t limit you to ESA minimums
• The layoff targeted you unfairly (age, disability, parental leave, etc.)

In these cases, you may be entitled to additional compensation or human rights damages.

• 🔗 Learn More: Track Layoffs in Canada

What Should I Do After a Restructuring Layoff?

1. Don’t sign anything immediately. Packages often undervalue your rights and entitlements.
2. Review your employment agreement. Many contain termination clauses that do not validly limit severance.
3. Seek legal advice. An employment lawyer can confirm if you offer is fair, and work to get you more.

Contact an Ontario Employment Lawyer

A restructuring layoff can feel like the end of the road, but it doesn’t mean you have to accept less than you deserve. At Samfiru Tumarkin LLP, our employment lawyers in Ontario have helped thousands of employees secure proper severance — as much as 24 months’ pay — after company downsizing.

At Samfiru Tumarkin LLP, we have:

• 👥 Represented 50,000+ Canadians
• 💰 Secured millions in severance payouts
• ⚖️ Settled over 99% of cases out of court
• 📱 Free Termination Consultations — in many, but not all, cases
• ⭐ Earned 3,000+ 5-star Google reviews
• 🏆 Named on of Canada’s Best Law Firms

Call us at 1-855-821-5900 or request a consultation online.